To do this in XSLT 1.0, you would need to create a named template, which would call itself recursively. It would take as parameters a string to split, and the delimiter on which to split it
<xsl:template name="split">
<xsl:param name="text" select="." />
<xsl:param name="delimiter" select="'!#'" />
Note, in this case the 'select' values in the parameters are default values, and would only apply if no explicit parameter is passed to the template.
In the template, you would text if the text contains the delimiter
<xsl:choose>
<xsl:when test="contains($text, $delimiter)">
If so, you would output the first part of the string, using substring-before
and then recursively call the named template using substring-after
<td><xsl:value-of select="substring-before($text, $delimiter)" /></td>
<xsl:call-template name="split">
<xsl:with-param name="text" select="substring-after($text, $delimiter)" />
<xsl:with-param name="delimiter" select="$delimiter" />
</xsl:call-template>
When the text doesn't contain the delimiter, just output it.
For example, given the following XML
<Invoice>
<AllowanceChargeReason>ISK:y!#x!#w!#q!#t!#</AllowanceChargeReason>
</Invoice>
And the following XSLT
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="1.0">
<xsl:output method="html" indent="yes"/>
<xsl:template match="AllowanceChargeReason">
<table>
<tr>
<xsl:call-template name="split">
<xsl:with-param name="text" select="substring-after(., ':')" />
</xsl:call-template>
</tr>
</table>
</xsl:template>
<xsl:template name="split">
<xsl:param name="text" select="." />
<xsl:param name="delimiter" select="'!#'" />
<xsl:if test="$text != ''">
<xsl:choose>
<xsl:when test="contains($text, $delimiter)">
<td><xsl:value-of select="substring-before($text, $delimiter)" /></td>
<xsl:call-template name="split">
<xsl:with-param name="text" select="substring-after($text, $delimiter)" />
<xsl:with-param name="delimiter" select="$delimiter" />
</xsl:call-template>
</xsl:when>
<xsl:otherwise>
<td><xsl:value-of select="$text" /></td>
</xsl:otherwise>
</xsl:choose>
</xsl:if>
</xsl:template>
</xsl:stylesheet>
Then the following is output
<table>
<tr>
<td>y</td>
<td>x</td>
<td>w</td>
<td>q</td>
<td>t</td>
</tr>
</table>
Do note you will have to take into account namespaces when you apply this to your actual XML sample.